The Corruption Allegations Against Benjamin Netanyahu

Israeli Prime Minister Benjamin Netanyahu has faced allegations of corruption before, but two recent probes may be more likely to damage him.

PHOTOGRAPH BY ABIR SULTAN / AFP / GETTY

In 2008, it emerged that Ehud Olmert, then Israel’s Prime Minister, was being investigated for having received cash-stuffed envelopes from an American businessman. I remember an acquaintance remarking, “Another kept man.” Like Ariel Sharon, Olmert’s predecessor, whose tenure had been dogged by allegations that he had accepted kickbacks from a South African executive, another Prime Minister was suspected of being beholden to moneyed interests.

This past week may have revealed yet another in the line of “kept” Israeli leaders. Police investigators interrogated Prime Minister Benjamin Netanyahu twice in recent days on the suspicion that he had received illicit gifts worth thousands of dollars from Arnon Milchan, an Israeli billionaire. These gifts, according to leaked reports, included Cuban cigars, at a cost of five thousand dollars a month, as well as jewelry and what the Hebrew press has poetically referred to as “pink champagne” for Netanyahu’s wife, Sara. Another wealthy executive, the Australian James Packer, allegedly paid for travel for Netanyahu and his wife and son, including stays at luxury hotels. Netanyahu has denied that any of the gifts amount to a bribe, stating that they were merely tokens of friendship. Still, police have reportedly found receipts in Milchan’s office for the purchase of cigars and other goods worth about a hundred thousand dollars. Israeli law prohibits public representatives from receiving any gift that isn’t “of small value and reasonable in context,” a somewhat ambiguous clause that will no doubt play a role in the Attorney General’s weighing of a potential indictment.

Another key issue will be determining whether Netanyahu gave Milchan or Packer anything in return for these gifts. Earlier this week, Raviv Drucker, an investigative journalist for Israel’s Channel 10, reported that, in 2014, Netanyahu on three occasions turned to Secretary of State John Kerry for help with securing Milchan’s U.S. visa status. (Neither Netanyahu nor Milchan has commented on these claims.) Drucker also found that Packer was awarded permanent residency in Israel. Drucker is a seasoned chronicler of the Prime Minister, whose reporting led to two previous police investigations of Netanyahu; one, involving the purchase of German submarines, remains active. On Wednesday, I asked him what he made of the latest developments. “No doubt, it’s more serious this time,” he said.

He was referring not only to the graft investigation but also to a second inquiry, announced this week, by Israel’s Attorney General. This inquiry involves allegations of a quid-pro-quo exchange between Netanyahu and a person described at first as a “well-known Israeli businessman.” That businessman, it was later revealed, is Arnon Mozes, Netanyahu’s archrival and the publisher of the newspaper Yediot Ahronot. Israeli police are believed to be in possession of two taped conversations, recorded by Netanyahu’s chief of staff around the time of Israel’s 2015 election, in which Mozes can be heard offering the Prime Minister favorable press coverage in exchange for the latter’s help in curbing the circulation of Yediot’s main competitor, the free daily Israel Hayom.

News that the two men had been in such contact came as a shock. “It would be a little like saying that Donald Trump met with Hillary Clinton on the eve of the election,” Yair Tarchitsky, the chairman of the Union of Journalists in Israel, told me on Wednesday. Mozes allegedly told Netanyahu that, if he agreed to promote legislation that would weaken Israel Hayom, such as the outlawing of free newspapers, “I will do everything I can to keep you around for as long as you want.” He now maintains that Netanyahu was the one who initiated the talks. Netanyahu, according to Haaretz, told Mozes, “If you rake me over the coals before the election, I’ll deal with you.”

“This will all come to nothing, because there is nothing,” Netanyahu has said repeatedly in response to the latest revelations. His line of defense in the second inquiry, according to Drucker, is that he had trapped Mozes into making the damning offer, and recorded him for that reason. “Netanyahu’s version now is ‘Everything I said in that meeting, in which I presented myself as the one who makes the business decisions for Israel Hayom, was a lie—a bluff,’ ” Drucker told me. And, indeed, no such deal between Netanyahu and Mozes came to pass: the bill to limit Israel Hayom’s reach never materialized, and Yediot’s coverage of the Prime Minister’s fourth term has been anything but favorable. Just last month, the newspaper ran a front-page headline that read, “Netanyahu Leads to Disaster.” Yet, even if Netanyahu’s account of his own motives is correct, the fact that the two men spoke at least twice, for hours, ahead of a general election, and that Netanyahu saw fit to entrap a rival and record him, would still present significant problems for him.

Corruption scandals are nothing new for Netanyahu. For the past five years, he has been mired in allegations ranging from the double billing of travel expenses to receiving illegal contributions. Some of the investigations opened against him and his wife bordered on the surreal, including allegations that Sara Netanyahu ordered new garden furniture for their official residence, in Jerusalem, and then swapped it with old furniture from the couple’s home in Caesarea, or that she systematically inflated the number of dinner invitees to the Prime Minister’s residence so that she could afford to hire pricier chefs. So far, no criminal charges have been made against the Netanyahus, and they have vehemently denied any wrongdoing. But the gravity of the latest investigations—Netanyahu has been questioned “under caution” in both the graft and the Mozes cases—suggests that this time there is suspicion of a criminal offense.

Netanyahu has reasons to worry. If elections were held today, according to the first poll taken since news of the investigations broke, his governing Likud party would go down to twenty-four seats from its current thirty, losing ground to the centrist Yesh Atid party, which would become Israel’s largest party, with twenty-seven seats. The right-wing bloc would still maintain an overwhelming majority in the Knesset, suggesting that, even if Netanyahu were forced to resign and Yesh Atid were the largest party after the next election, Lapid would still find it next to impossible to form a coalition. Asked directly who is most fit to serve as Prime Minister, thirty-seven per cent of Israelis still favor Netanyahu, compared with thirty-three per cent who prefer Lapid, suggesting that, for now at least, many of the Prime Minister’s supporters remain unfazed by recent developments.

But there are indications that Netanyahu’s coalition is beginning to fray. While a handful of Likud politicians publicly stood behind him this week, others have been tellingly quiet. “We asked the ministers to defend the Prime Minister, but each of them is making his own political calculations,” David Bitan, the coalition chairman, told Israeli radio. In an apparent sign of panic, Netanyahu has cancelled his planned attendance at the World Economic Forum in Davos next week. “He is beginning to resemble those leaders who are afraid to leave their country and discover that, in their absence, there had been a putsch,” Yossi Verter wrote in Haaretz on Friday_._

Avichai Mandelblit, the Attorney General charged with deciding whether to indict the Prime Minister, is a former Cabinet secretary under Netanyahu. He is generally respected and has shown a degree of independence by pursuing the allegations, but his position renders him “handicapped,” according to Drucker. “No Attorney General, and especially not this one, would hasten to indict a Prime Minister when they know it might lead to his ouster,” Drucker told me. “On the other hand, he can’t exactly close the cases, because they’re severe, so he will do what other Attorney Generals have done: he will put them on a shelf, and every once in a while he will do something—call someone in for questioning, that sort of thing—but will make sure to drag his feet.” As an example, Drucker pointed to the fact that Mandelblit stalled the Mozes probe for months despite being in possession of the tapes. Mandelblit has said that he decided to wait for when the graft allegations came to light so that he could pursue the investigations simultaneously.

It might become impossible to drag out these cases for much longer, though, particularly the illicit-gift investigation. Olmert is currently serving nineteen months in prison for graft. The former treasury secretary Avraham Hirschson, the former tourism minister Shlomo Benizri, and the current interior minister, Aryeh Deri, have all been convicted of accepting bribes. Until now, Netanyahu has appeared immune from criminal charges. But, as Drucker put it, “every public representative who has ever been convicted of similar things in the past would be able to say, ‘Excuse me, why me and not him?’ ”